UNFAIR COMPETITION PRACTICES

UNFAIR COMPETITION PRACTICES

Cao Xuan Quang – Deputy Head of Unfair Competition Division

EXPERIENCES FROM VIETNAM

Viewpoints in this presentation do not necessarily express those of the VCA

Hanoi, March 2011

www.vca.gov.vn www.qlct.gov.vn

CONTENTS

1. VIETNAM COMPETITION AUTHORITY

2. REGULATIONS ON UNFAIR COMPETITON

3. CASES HANDLED BY VCA

1. Vietnam Competition Authority

A governmental agency under Ministry of Industry and Trade.

Functions: Competition; Anti-dumping, anti-subsidy, application of safeguard measures; Consumer Protection.

VCA’ functions, duties and powers are regulated by the Government.

Vietnam Competition Agencies: Vietnam Competition Authority and Vietnam Competition Council

1. VCA - Functions and duties

Competition: Investigate competition cases on competition

restriction acts. Investigate and handle competition cases on

unfair competition acts and other violations against competition law.

Control the process of economic concentration. Detect and recommend relevant agencies to settle

upon authority issued documents with inappropriate content according to competition law.

Build competition law and policy.

1. VCA - Organization

Leaders Director General: appointed by the Prime Minister

upon the recommendation of Industry and Trade Minister.

Deputy Director Generals: appointed by Industry and Trade Minister.

6 Boards International Cooperation Board ( Board I). Trade Remedies Board (Board II) Consumer Protection Board (Board III) Competition Policy Board (Board IV) Unfair Competition Investigation Board (Board V) Antitrust Investigation Board (Board VI)

1. VCA - Organization

3 Offices: General Office in Hanoi. Branch office in Ho Chi Minh city. Branch office in Da Nang city.

2 Centers Center for Competition and Information Data. Center for Investigator Training.


1. VCA - Human resource

HUMAN RESOURCE

2007 2008 2009

Number of Staffs

40 60 85

Average age 32 30 29

Major field

Law 10 20 30

Economics 20 35 40

Other 10 15 15

GenderMale 27 42 50

Female 13 28 35

Tile

Bachelor 33 49 62

Master 6 10 17

Ph. D 1 1 1


CONTENTS




2. Law enforced Competition Law:

Adopted by the National Assembly in December 2004 and took effect since July 1st 2005.

Guidance documents: Decree No. 116/2005/ND-CP by the Government

dated September 15th 2005 on enforcing some articles in Competition Law.

Decree No. 120/2005/ND-CP by the Government dated September 30th 2005 on handling violations against competition law.

Decree No. 110/2005/ND-CP by the Government dated August 24th 2005 on management of multi-level sale practices.

2. Related Regulations Intellectual Property Law:

The IP Law 2005: Took effect since 1 July 2006. The law on Amendments to the IP Law 2005: Took

effect as from 01 January 2010. Decree No. 97/ND-CP by the Government dated

September 21st 2010 on sanctioning of administrative violations in industrial property.

Law on Commerce: Law on Commerce 2005: January 21st 2006. Decree No. 06/2008/ND-CP by the Government dated

January 16th 2008 on dealing with breaches in Commercial Activities.

Decree No. 37/ND-CP by the Government dated April 4th 2006 on detailing the Commercial Law regarding Trade Promotion activities.

2. Related Regulations Law on Advertisement

Ordinance on Advertisement: Took effect since 1 May 2002.

Decree No. 24/2003/ND-CP by the Government dated March 13th 2003 on detailing articles of the ordinance on advertisement.

Decree No. 56/2006/ND-CP by the Government dated June 6th 2006 on sanctioning of administrative violations in cultural and information activities.

Decree No. 02/2011/ND-CP by the Government dated January 6th 2011 on sanctioning of administrative violations in press and publication activities.

2. Related Regulations

Law on Consumer Protection: (shall take effect since July 1st 2011 )

- Decree on detailing articles of the law: Drafting;- Decree on sanctioning of administrative violations:

Drafting; Other regulations:- Insurance;- Banking and finance;- Electricity;

- Others.

2. Unfair Competition Acts

Definitions: (Article 3.4 – Competition Law 2005):

“ Unfair competitive practices means competitive practices by an enterprise during the business which are contrary to general standards of business ethics and which cause or may cause damage to the interests of the State and/or to the legitimate rights and interests of other enterprises or of consumers”.


Unfair Competition Acts (Article 39 – Competition Law):

1. Misleading indications;

2. Infringement upon business secrets;

3. Constraint in business;

4. Discrediting other enterprises;

5. Disturbing business activities of other enterprises;


Unfair Competition Acts (Article 39 – Competition Law):

6. Advertising for the purpose of unfair competition;

7. Sale promotion for the purpose of unfair competition;

8. Discrimination by associations;

9. Illicit multi-level sale;

10. Other acts prescribed by the government.

2. Unfair Competition Acts - Fines

Decree No. 120-2005-ND-CP A fine of from 5 millions VND to 20 millions VND can be

imposed for breach of provisions on :- Misleading indications;- Infringement upon business secrets;- Constraint in business;- Discrediting other enterprises;- Disturbing for the purpose of unfair competition;

2. Unfair Competition Acts - Fines

A fine of from 15 millions VND to 50 millions VND can be imposed for breach of provisions on:

- Advertising for the purpose of unfair competition;- Sale promotion for the purpose of unfair competition;- Discrimination by associations; A fine of from 50 millions VND to 100 millions VND can

be imposed for breach of provision on illicit multi-level sale.

In addition to these fines, with differences for each breach, some other penalty or measures can be applied….


CONTENTS




3. Competition cases -2006

2006

8

1 12 2

00

2

4

6

8

10

Initative Investigation Decision

Unfair Competition Cases Restriction Competition Cases


200714

5 53

10

0

5

10

15




2008

1513 13

53

00

5

10

15

20




200919

1412

7

31

0

5

10

15

20



3. Competition cases(2006-2009)

8

1 1

14

5 5

1513 13

19

1412

2 20

31 0

53

0

7

31

0

5

10

15

20

Ini Inv Deci Ini Inv Deci Ini Inv Deci Ini Inv Deci

2006 2007 2008 2009


3. Cases on misleading indications

Complainant: Center A: Product: Wat-Clean

Investigated party: Company B: Product: Bitico

Violations: Misleading indications on

packing

3. Cases on misleading indications

Complainant: GlaxoSmithKline Product: Zinnat

Investigated party: Company B: Product: Zaniat

Violations: Misleading

indications on packing

3. Discrediting other enterprises

Investigated party: Saigon Petro.

Sector: Gas Violation: Sending leaflets to

customers to discredit other enterprises by incorrect information on price and quality of products.

3. Unfair Advertisements

Investigated party: Company A. Product: Functional foods (Vitamins) Violation: Providing false and

incorrect information on nature and use of products to customers.

3. Unfair Advertisements

HOW TO REGULATE

How to regulate effectively unfair competition practices in Vietnam:

1. Enhancing the capability of the implementing agencies;

2. More regulations: Detailing the definitions (General standards of business ethics)…;

3. Dealing with unfair competition issues in other sectors;

4. Co-operating with regulatory agencies and other domestic agencies;

5. Co-operating with international organizations and foreign competition agencies…

Cao Xuan Quang – Deputy Director of Unfair Competition Board

UNFAIR COMPETITION PRACTICES

Documents

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